Israel - Follow The Money

1."Defense News" ranked Israel in third place last year for arms exports, after the US and Russia.

In defense exports, Israel is already considered a power. "Defense News" ranked Israel in third place last year for arms exports, after the US and Russia. In homeland security-related exports, Israel is among the 10 leading countries, and the annual sales of Israeli defense companies are estimated at $1.5 billion.


COMMENT: Does anybody remember the days when Israel had to plead for aid to defend herself .

2.IDF and Chinese army spokesmen to cooperate

Chinese Army officers will take courses at IDF Spokesman's Office facilities.

The Chinese officers will come to Israel for courses in combat photography, spokesmanship in situations of mass casualties,  and conduct vis-à-vis the public about casualties during public incidents. The PLA officers will probably participate in an IDF Homeland Command exercise.

 

3.Delek Energy unit reports  

   Russian oil reserves

Matra Petroleum plc (AIM: MTA), a Russian oil exploration subsidiary of Delek Energy Systems Ltd. (TASE: DEOL) unit reports that the Sokolovskoe Field in the Orenburg area of the Ural Mountains has 15.1 million barrels of contingent recoverable resources.

COMMENT: An Israeli Company discovering oil in Russia........What is the world coming to??

 

4.Bibi first Israeli PM to visit Greece

JERUSALEM (Arutz-7) – Prime Minister Benjamin Netanyahu travelled to Greece on Monday, making him the first sitting Israeli prime minister to visit the country. His trip follows Greek Prime Minister George Papandreou’s visit to Israel in July. During this latest meeting, Netanyahu and Papandreou were expected to discuss the possibility of forging defence ties, officials said. In July, Netanyahu said Israel and Greece would undergo “a major upgrade in relations” that would include closer ties in finance, tourism and technology.

COMMENT: And the Turks are still waiting for an apology.....??H

The truth does not change according to our ability to stomach it 

 F. O'Connor

Obama and Israel

If the jury is still out regarding Obama's economic policies, the same cannot be said regarding his Israel policy. There is no doubt that Barak Obama should be regarded as hostile to The Jewish State, and at best,
he might be neutral. The pre-election gestures to Israel, and the friendly words are simple lip service and can be regarded as such. Fortunately for Israel, this stance is balanced by the American people and congress, who are clearly not so easily persuaded.

So what is the Obama agenda? The Muslim world is divided between Shiite and Sunni Muslims. It is also divided between Arab muslims and others. Iran regards herself as the leader of the Shiite world and has a grand plan for leadership of the Islamic nations. Egypt, Saudi Arabia and the gulf states, amongst others, all fear the Iranian leadership challenge to the Arab world (Iranians are not arabs). Imagine if Iran developed a nuclear capability. That would upset the balance of power in the area. Every time Iran threatens Israel with annihilation, a shiver must run through these countries. And if you are not yet convinced, Saudi Arabia recently allowed Israeli planes to land in a deserted area of the kingdom, close to the Iranian border.

This would also explain why the US administartion,during the last year, has supplied these nervous Sunni countries with anti-missile batteries for sums amounting to at least ten billion dollars. Obama also knows that a solution to The Palestinian Issue (even temporarily), would hold him in good stead with these countries and help create an Anti-Iranian coalition. He pressured Israel into a ten month freeze on settlement expansion. Then he kicked up a fuss about building in Jerusalem. Something that no American President before him had ventured. Anybody remember all the election promises...(Jerusalem the capital of Israel etc.)

This is where it all began to go wrong. A miscalculation. This move was perceived as weakness by the Palestinians and the so called face to face talks went nowhere. Just imagine, pre-conditions for face to face talks. Disneyland. A weak infidel president. Israel stands firm, elections around the corner and that's where we stand right now. Gridlock (a little like the economy).

Once again we need to look at who this man, Obama, is. I honestly believe that he has good intentions. It is in the nature of his elitist left wing intellectual background to see the world through optimistic eyes. To believe that all humanity is basically good, just and upright, especially mixed with his special brand of confidence and oratory skills. After all, humanity has come a long way. Another miscalculation. It's called "The nature of the beast". Ever tried shaking hands with a crocodile?

Mister Obama, the road to hell is paved with.......

Never ascribe to malice that which can adequately be explained by incompetence - Napoleon Bonaparte 
H

Obama and The Economy

I need to get a few things off my chest as regards Obama. My opinion for what its worth...

1. Obama is not a Muslim as some claim. Clearly though, he is more pro muslim than most American presidents.

2.Its pretty unfair to shoulder him with all America's economic woes. He inherited decades of
economic decadence and mismanagement by previous administrations and their cronies, The Congress, Senate and Federal Reserve.

3.No matter who the president is, his priorities would have been the same. Save the Banking system,
decelerate the market collapse, stabilise the real estate and mortgage markets and prevent unemployment from worsening.

That being said, I find it fascinating to try and analyse the man's mind and thereafter his decision making processes. Obama grew up poor, raised by his white mother. His black father split early in Obama's infancy. Obama rose in the ranks, convinced that he was smart, an intellectual, so smart that his intelligence could overcome the disadvantage of his color. Obama was also a convincing speaker. Obama grew up, as do many a poor boy, distrusting and probably envying the wealthy. "I'm smarter than they are, I haven't made the big bucks as they have, but I can do better than the billionaires, I'll get my power through politics and by using my voice and my brains." So far so good, but this is where I part ways with this gentleman.

 Obama resents the rich, he believes that the meek and the poor should inherit the earth or at least the US. I think this is the key to Obama. The nation should be run from the top, by the intellectuals. The markets are merely a reflection of the ignorant masses. The true brains at the top of the government power structure should run the nation. In fact, the government should run everything. The people should just follow directions and obey. Which is exactly the path that this President is on. 

So now let us can look at his decision making process. Obama takes power, the markets are in chaos, and the economy is sinking. Whats first on the agenda? Not small business, not jobs, in fact, not the economy. His health plan. The US is sinking into recession, and he turns socialist. Business will be obliged to include health insurance for employees. More expense, not less. Have to plan ahead. So what about jobs? So much more logical to get the economy back on track first, and then try the socialist experiment.

Two years and a trillion dollars per year deficit. To hell with future generations. Let them pay the debt. Tax the rich and give to the meek and the poor. A true Robin Hood. Great if you are an intellectual, catastrophic
for an economy in recession. So while the US plays love thy neighbour, China, India and Russia are breathing down his intellectual neck. Trust me when I say, there is blood in the water and the sharks are circling.

Two more quickie decisions. Small but significant enough to give an insight. The New Bank Legislation reception was accompanied by the non-invite to heads of Morgan Stanley and Goldman Sacks. A direct affront to Wall Street. Divide and Conquer. A mistake? I know the answer, but time will tell.
Next he decides to appear on a television show, "The View" , cancelling an appearance at The Boy Scouts Centenery celebration. Apparently there was more exposure on the TV show. A choice was made. Why not appear the following week on TV?
There appears to be a problem with priorities....

This all gives me an uncomfortable feeling. You know that feeling when a second hand car salesman sells you a beautiful car, you drive it around the corner and the engine falls out? Am I alone with this feeling? Who is this man? Is he an impostor? Is he a citizen of the world? Is he the leader of the free world? Is he a good president?

The first rule of holes: when you're in one, stop digging - Molly Ivins


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Israel - Follow The Money

1.IAI in $400m Russian UAV deal

Israel Aerospace Industries Ltd. (IAI) (TASE: ARSP.B1) has signed a $400 million contract to sell unmanned aerial vehicles (UAV) to Russia's open joint stock company OPK Oboronprom. Deliveries will be made over three years. The Russian authorities still have to approve the deal. Oboronprom will pay IAI a $280 million down payment, and will pay the balance as the UAVs are delivered.
COMMENT: Well, well...Russia purchasing arms from Israel. That's one for the books.

2.Elbit Systems in $68m US follow-on deal

The indefinite delivery/indefinite quantity (ID/IQ) contract is a follow-on to a $75 million contract from September 2005. The new display units increase situational awareness and safety by allowing pilots to fly "head out of the cockpit" during day and night operations.

3.Canada, Israel to look at expanding free trade

Two-way merchandise trade has more than doubled since implementation of Free Trade Agreement between two countries, Canadian minister says during visit to Israel

“Canada’s ties to Israel are very deep, and our friendship is important. Our government is building on these ties and looking at opportunities to expand our trade relationship. We are committed to creating new sources of jobs, growth and prosperity for both of our countries in the years ahead.”

4.Warren Buffet: Israel has a surplus of brains
Leading international businessman and philanthropist was in Israel this week to attend a major economic conference. When asked why he was bothering with the small Jewish state, Buffet explained that Israel has a surplus of human ingenuity that he just can’t ignore. "We are always interested in more investments in Israel. We will be happy to acquire a large and independent company in Israel, or some small companies - what I call mergers into the existing framework and I think we will do both,"

5.Kibbutz industries look to raise NIS 3b

As the kibbutz movement celebrates 100 years, the number of kibbutz owned companies on the TASE is set to double.

   20 kibbutz companies are currently traded on the Tel Aviv Stock Exchange (TASE) today and the number of kibbutz owned companies traded on the TASE is set to double in the coming years.

COMMENT: This is almost as good as the Russians buying weapons from Israel....

6.Fischer wins best bank governor of the world

award

Governor of the Bank of Israel Stanley Fischer on Sunday won the best bank governor in the world award for 2010 in Washington DC. He was chosen among all the central bank governors throughout the world.

7.For those who are willing to make an effort, great miracles and wonderful treasures are in store - Issac Bashevis Singer


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Bloomberg and Russell

1.Wall Street Journal - China's central bank today raised interest rates for the first time in nearly three years, the strongest move yet by Beijing to withdraw stimulus that helped the economy weather the global slump but now threatens to fuel inflation.

2.The news shook up currency markets, with the U.S. dollar jumping. The move is likely to slow down China's rapid growth and hit its demand for raw materials, in turn putting pressure on the Australian and Canadian dollar, which are highly dependent on commodities exports.

Comment: As the USD strengthens so equity markets fall.
Interesting question: Who leads global markets today?  When China sneezes......

3.Clearly, the biggest question and argument at this time is whether we're heading into deflation, inflation, stagflation -- or deflation and then inflation. Nobody has a clear answer to this puzzle, so "why push it? What's wrong with just waiting and observing."

4.The Fed is obviously and openly worried about deflation (or as they put it, "not enough inflation") and they're worried sick about unemployment. Many believe that the Fed is ready to sacrifice the dollar if that's what it takes to beat deflation.

5.On November 3 the Fed Open Market Committee meets, and the widely-shared expectation is that the Fed will trigger QE2, meaning a new wave of quantitative easing.
The last thing the Fed wants is to disappoint the markets -- thus the markets are primed and ready for QE2. 

Question: Has QE2 been fully discounted?

Remember the rule: A country's economic power is measured by the strength of its currency.

6.We can't solve problems by using the same kind of thinking we used when we created them - Albert Einstein

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Supply and Demand...

Headline: A century ago, world population was around  a billion souls. Today, seven (7) billion people inhabit our planet. 
To summarise previous posts, the first decades of the 21st Century will be characterised by shortages of food, energy, raw materials, land and clean water. Lets look at the figures since January, and all this in spite of an economic slowdown.....

Scoreboard year-to-date in percentages
Gold.....+ 23/6%
Silver.....+38.7%
Platinum .....+15.5%
Palladium.....+ 44.6%
Copper....13.6

Agricultural
Cattle (lb)....................+12.0%             
Coffee (lb)...................+36.9%
Corn (bu).....................+37.3%
Cotton (lb)...................+46.7%
Lumber(1000 bd.ft.)....+32.9%
Orange Juice (lb)..........+19.7%
Soy beans (bu)..............+13.2%
Wheat (bu)....................+29.8%

It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change - Charles Darwin

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"The Middle East has oil, China has Rare Earths".

Have you ever heard of the Diaoyutai Islands in the East China Sea? I haven't. But just five weeks ago, this tiny island chain became the focus of a superpower dispute between China and Japan — ancient rivals that have laid claim to the land and to the oil and natural gas reserves that lay below the sea floor.
The events unfold as follows

1.On September 7th, a Chinese fishing vessel collided with a Japanese Coast Guard ship in the waters off the disputed island chain. In a provocative move, Japan arrested the Chinese boat captain, as well as 14 other Chinese who were on the boat.

2.China called the skipper's arrest invalid and illegal, arguing that the islands have been part of China since ancient times. They demanded the immediate release of the captain.
In response, a group of Japanese ruling party lawmakers said the Japanese government should consider stationing troops on the islands.

3.When Japan didn’t comply with the request, China responded with a devastating economic decision...
On September 22nd, the Chinese halted exports to Japan of a vital metals group  called rare earth elements, and they’ve become some of the most sought-after metals by governments and corporations alike.
China accounts for over 95% of the global rare earth production. This means that if you want rare earths, you have to go to China.

4.According to the New York Times, "The Mideast had oil, but China has Rare Earth Elements. As OPEC did with oil...China is about to tighten its hammerlock on the market for some of the world's most valuable metals."
From hybrid car batteries to wind turbine motors to missile guidance systems... From iPhones to solar panels to flat screen TVs…
Metals such as cerium, promethium, europium, and many of the remaining 17 rare earth elements are essential to all modern electronic devices that use:

• rechargeable batteries
• electric motors
• photo optics
• solar cells
• strong magnets

Toyota’s hot selling hybrid car, the Prius, uses more than half-a-dozen rare earth metals.

5.Bottom line: Without rare earths, Toyota’s production of the Prius comes to a halt. Without rare earth metals, there can be no hybrid or electric car industry. And without rare earth metals, there can be no renewable energy market. Imagine a cellphone the size of a shoe. Or a laptop weighing 10 kilograms. That’s what we would be carrying around today, if not for the rare earth metals.  Their unique properties that have enabled the miniaturization of  electronic components including capacitors, lasers and powerful magnets. 

6.Needless to say, and without further ado,the Japanese, immediately released the Chinese boat captain. 

Congress and the Senate immediateley passed bills instructing the secretary of energy to issue a report to industry describing available mechanisms for obtaining government loan guarantees to reestablish a domestic rare earth supply chain; and (2) issue guidance for the rare earth industry on obtaining federal loan guarantees.

Too little too late?
As the world looks to sources for its rare earth supply outside of China, this crisis has set off a bull market in rare earth mining stocks.

Take a look at Rare Element Resources (AMEX: REE):
 

Fascinating, isn't it? (also check out "Supply and Demand 2" on this blog)

Harry

Israel - Follow The Money

1.Israel and India move toward free trade pact
     Economic relations between Israel and India are set for a significant upgrade in the coming months. Minister of Finance Yuval Steinitz met with his Indian counterpart Pranab Mukherjee in Washington DC on Friday, and the two men agreed to prepare the ground for a free trade agreement (FTA) between their two countries. Negotiations on a financial protocol will begin in November.

2.State budget enjoys NIS 1B surplus in September 
According to Yedioth Ahronoth, the surplus beat predictions of a deficit to that effect. Analysts believe September's surplus was the result of higher tax revenue. Figures mean State deficit unlikely to exceed 4% at year's end .

3.Israeli chutzpah a hot commodity in China
Industry, Trade and Labor Minister Binyamin Ben Eliezer's recent visit to China was highlighted by an unexpected surprise. The city of Shenzhen, which he visited, declared it regards Israel as a country with which it would like to explore technological cooperation, after initiating a seminar calling Chinese companies to invest in Israel. Not even the United States or South Korea were singled out in this way.
Shenzhen is not alone. The hi-tech fair held in Tianjin this year showcased the Israeli flag, which is the only foreign flag to appear in the event's website.

4.Chinese co in talks to take over Makhteshim
China National Chemical Corporation (ChemChina) and Koor reached a tentative understanding on a deal under which ChemChina will buy all the public's shares in Makhteshim, and ChemChina will also buy 17% of Makhteshim from its parent company Koor. The transaction will effectively value Makhteshim at approximately $2.72 billion  (That's  "Billion", not "million)!
Comment: China continues to purchase raw material sources around the world as part of of their diversification, while Israel's Foreign currency reserves grow to 66 billion in Sep. This is the first I have heard of such a large Chinese investment in Israel. Clearly, Iran does not bother them.

5.Jerusalem ranked among top 10 cities in world
    Now it's official: The city of Jerusalem has been ranked as one of the world's top 10 attractive traveling destinations. In massive online poll launched by popular travel site Trip Advisor, City of David chosen one of world's top attractive traveling destinations - before London, Istanbul and Venice. Capital described as having 'profound cultural and historical significance'

6. It's not what happens to you, but how you react to it that matters - Epictetus (philosopher)

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There is no rush like a gold rush

The dye is cast. Three thousand years of history is shouting from the rooftops and making its way into our living rooms. The rush is on.

Does it really matter that we have all these primitive thoughts? After all what is it that the barbarians knew that we don't? Every system in history was based on the gold standard, and when most empires removed the gold content from their coins, replaced them with lesser metals and then proceeded headlong into mediocrity.

 How did all of this get started? Once upon a time some fellow came up with this idea which he named a bank. He was prepared to take in all types of  gold and silver, lock it all away in a safe place and issue a certificate stating that he was willing to exchange that certificate for gold at any time or place. That, ladies and gentleman, was your first currency note with a gold standard.

As time went by, we invented the telephone, TV, motor vehicles and computers. The brilliance of mankind knew no boundaries. The powers that be landed a man on the moon. Imagine that. Confidence was brimming, and gathered further strength with the collapse of communism. So then along came another fellow by name Nixon and convinced us (who needed convincing?) that as long as we had the almighty American Dollar, who needs a gold standard. After all, a nation's economic power is measured by the strength of its currency, and the dollar had swept all before it. Basically, the power to create money had been removed from the limitations of a gold standard and placed in the hands of Congress and The Federal Reserve. Like placing a cat in charge of the milk. Simple but true.

It has often been said that there is a thin line between self esteem and arrogance. Somewhere along the way that line was crossed.

So self esteem changed to arrogance and then greed was added to the mixture. Central banks had no need of this non-yielding asset and sold their gold, in hindsight, at ridiculous prices and replaced it with goverment debt. Everybody was coming to the party. Euphoria drowned out the solitary voices of warning. Who were these people trying to interrupt our party? Humanity had developed past this primitive ideology. Quiet! Great minds with great theories are at work here.

Do not interfere. Everybody has a home, a car and a dog to prove it. Sweet talking politicians joined in the celebrations.

Fast forward to today. Central Banks have ceased gold sales. The developing economies are now part and parcel of the same family. None of them are buying the American dream. There is a manouvering for power and new candidates are raising hands. Diversification is the name of the game. Gold is on the rise,and the once mighty US Dollar is in decline. We ask ourselves what we have done to future generations, while politicians try to hang onto power by the

skin of their teeth.

Uneasiness takes hold as the markets dictate a new order, and show us that we are human, after all. History is repeating itself whilst we observe in high definition or even in 3D. Nothing glitters like gold. This was correct for centuries, and it is correct today. Despite claims to the contrary, gold remains the only "Honest Currency".

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Market GPS (2)

Statement: The only way to pay off the massive US debt and stimulate the economy is to devalue the American dollar.

And so you ask why? Lets look at what might happen....

1.The most obvious conclusion is that it lessens the debt paid to foreign countries. Example: Japan purchases US treasury notes at a certain value (x). So when they eventually sell the notes, they receive the devalued dollar (y) which has less buying power for the Japanese. This has been going on for decades, and the only question is... for how much longer?

2.The biggest fear in the administration is the forbidden word "deflation". A synonym for an even more deadly word. DEPRESSION. There is no solution to deflation, which creates huge unemployment and everything that goes with it. So they will continue to print paper money until prices begin to rise.

3.A falling USD  creates the following scenario(s).

A.All commodities are denominated in USD, therefore their price will rise. A rising price of, say a barrel of oil will cause the energy sectors on stock markets to rise. The same goes for gold, copper and, basically all assets denominated in US Dollars. This in turn will reverse the flow of funds from the markets and create rising markets. Rising markets will draw investment, and investment creates employment. Profits rise and therefore more taxes collected and so on....

B.All imports to the US will rise in price, creating inflation (most desired). Inflation creates a movement of funds out of cash and into assets like real estate, jewellry, furniture and anything else of value. This also reverses the flow of funds from different markets, and everybody from Wallmart to Apple to Google benefits. Wall Street rises and fear and worry are on the decline.

C.Exports become more profitable and industry goes back to work.

So right now, this appears to be working, albeit, slowly. Markets are up. Gold is jumping, commodities are on the rise and "quantitive easing"  will continue. What a great expression that is. Invented by economists and politicians to separate themselves from the man on the street, while appearing to be knowledgable. Somebody would think they had invented the wheel! It means "printing of paper money".

So if everything is so good, then what's the catch? 

1.This can only work if the world continues to accept the USD as the reserve currency. As we know, a country's economic power is measured in the strength of its currency. China is definitely manouvering to take over world economic leadership. They have time and patience. They are also quietly diversifying their currency reserves....but that's a story for another day.

2.As long as the devaluations are slow, the danger appears minimal. However, a sharp quick drop by the dollar will create uncertainty and all the good work will be undone.

3.Loss of confidence in US treasuries would cause yields to rise, and another bloated market would be in danger of deflating.

So, not so easily done. The only sure thing is that the printing machines will continue, and you can take that to the bank!

Check out  http://stockcharts.com/charts/gallery.html?$USD
H